Borough Exports Include Housing, Labor

The Matanuska-Susitna Borough’ s unique economy is affecting many other areas of  the state.  That’s the word from a noted economist, who outlined his findings before the Borough Assembly on Tuesday.

Economist Neal Fried is calling it a “boom”.  Fried says the Borough’s growth is reflected in housing, schools — almost every area — except, paradoxically, in employment.

But Fried says local job growth is actually not a good indicator of the Mat Su area’s economy. Although about one thousand retail, health care and hospitality jobs were added over the past decade, the Borough’s jobs growth has been tied firmly to Anchorage. Fried says over 40 percent of workers living in Mat Su earn their paychecks elsewhere.

“Anchorage obviously is the biggest place that those earnings come from, but a big chunk comes from the North Slope Borough,” Fried said.

He says the Mat Su provides the second largest supply of labor to the North Slope after Anchorage.  What does this mean to the state? Fried is not sure. He says the Valley contributes to the state’s broader growth, but one of the areas that Mat Su differs from the rest of the state is in the jump in Valley school enrollment:

“It’s been very rapid here, very different story from what’s happening to elsewhere in the state. Same with population growth, you know, population’s been growing much faster. So, you know, if you need more infrastructure, whether it’s new roads, more schools, there’s probably more demand for that in a place that’s growing fast,” Fried said.

While school enrollment in other areas of the state peaked in 1999, and has since declined, Mat-Su schools grew 9 percent during the last five years. So building more schools and creating more infrastructure will cost the state but, Fried notes, Mat Su’s affordable housing benefits the state on the whole

“In some way, the Mat-Su Valley kind of exports housing. I know that sounds strange, but exports housing to the rest of the state, because a lot of the people who live here don’t work here. They work all over. They can live somewhere else. They don’t necessarily have to live here, but they choose to live here. So, in a sense, the Mat Su Valley is providing housing services to a significant slice of Alaska’s population, whether they work on the Slope, Anchorage, Red Dog, Bristol Bay or somewhere else,” Fried said. 

The pattern of labor and housing “exports ” from the Mat-Su has benefited Mat Su’s economy. Fried’s research shows that more earnings flow into the Mat Su than flow out, making it unlike any other part of the state.

“It’s very significant. You know, the last year I looked, 8 percent of the Valley residents work on the Slope, but almost $220 million flow in from payroll from the Slope.  And almost as much earnings come from Anchorage to Valley residents than earnings from Valley residents earning their wages right here in the Valley,” Fried said. 

Fried says these trends have been not changed for quite a while and are expected to continue. He says population growth is the most important indicator of the areas’s economy. Between 2000 and 2012, Mat Su population grew some 58 percent, compared with Anchorage growth of 15 percent and the state’s 17 percent. For more information on Mat Su’s economy, see Alaska Economic Trends for February.

Listen to the full story

Download Audio